I really don't think Labour leader David Cunliffe had a cunning plan to hide the fine print print of his party's Best Start policy from the public last week. Because, frankly, making a statement about how many families would be covered by the baby bonus that is contradicted by the policy paper you've posted on the internet is just too dumb to be a cunning plan.

Even Patrick Gower, who kicked off the story with a blog post declaring that Labour had been "deliberately misleading" and "dishonest" in not being clear that families already in receipt of paid parental leave (which Labour is promising to extend to six months) would not be eligible for the newborn payment of $60 a week subsequently started referring to it as a mistake. (After all, if you're going to perform a bait-and-switch, it's customary to wait until you're safely elected, not do it on the same day.)

Allowing double-dipping would have have been inappropriate -- indeed, that was the first criticism aired about the new policy by David Farrrar, when he thought that's what the policy said. But although the URL for the full policy document had been noted in the material given out to journalists, the limit on eligibility wasn't mentioned in the printed material or Cunliffe's speech.

Thus, John Key and his ministers have had a week to smugly declare that Cunliffe couldn't be taken at his word.

And in the end, I'm not sure the policy itself was up to much. Adding complexity to an already complex system of allowances and credits doesn't seem particularly visionary. I see that I wasn't the only one to be put in mind of Bill Rowling's unfortunate 1975 "baby bonus". Brian Rudman covers that angle.

The next day, Labour's new Revenue spokesman David Clark seemed to enter some sort of fever dream when he indicated to Tova O'Brien that banning Facebook in New Zealand would be an option for a Labour government looking to force the company to pay tax more commensurate with its actual local income.

Tax avoidance by global companies is a genuine issue, and not a new one -- if you look at the way, say, Microsoft arranges its local tax affairs, you'll see that it's not all very local. It's why Facebook, Apple and Google have foreign billing addresses in Ireland, where they can get tax relief -- and why Google got mildly stung last month by the British Revenue.

But countenancing a state ban on a website used by more New Zealanders than any other? And not just individuals, but whanau and groups and organisations, many of whom rely on Facebook as a platform to support and stay in touch with each other?

Clark should never have ventured on this issue without having a considered answer to the bloody obvious question of what we might do about getting these companies to pay their fair share of tax. His flub is doubly damaging because it put Labour on the wrong side of issues that seem likely to play a significant part in the election year-year conversation.

Every time Labour tries to make its case for internet freedom, or to pitch for the untapped youth vote that everyone's talking about this year, its opponents will cheerily recall that Labour is the party that wants to ban websites. John Key, whose government secretly worked to bring the full apparatus of state down on an alleged copyright infringer and passed the GCSB Bill, will doubtless be laughing.

Key's government has not exactly been showing its own best face lately. In particular, the behaviour of two ministers, Judith Collins and Anne Tolley, has fallen woefully short of the standard that the taxpayers who keep them in ministerial drivers should expect. But at least they know how to launch a policy without aiming it at their own damn feet.

46 responses to this post

Because, frankly, making a statement about how many families would be covered by the baby bonus that is contradicted by the policy paper you’ve posted on the internet is just too dumb to be a cunning plan.

But what’s even harder to explain is why this happened in your first major set-piece speech of an election year – surely that’s something where every syllable has been drafted to near-death and every conceivable attack line anticipated and refuted?

Something else that gob-smacked me about this is that Cunliffe isn't a complete numpty and proved to be a competent, articulate finance spokesman under Goff. I can't see how he didn't anticipate this.

Even little things like the scheduling clash with the Grammy’s where surely a large part of the electorate they’d like to be engaged only had eyes for the Staples Centre.

I’ll grant that, but regardless it was still a heavily covered political story in an election year. And like it or not (and I generally don’t) the press are going to be parsing every word Cunliffe and Key say for something that can be presented as a “flip-flop” or a credibility fail. Arguing whether it’s fair, days and weeks after the fact, practically speaking, is beside the point.

A line worthy of Karl Rove that would have been delivered at the first opportunity if not this one. Definite strategy to attack opponents for your own weaknesses. Those Transrail eyes..

Well, Sasha, I’d respond that snark cuts both ways. Labour’s been quite happy to relentlessly paint this government as all spin, no substance and enough bullshit to double New Zealand’s mushroom production. As Cameron Brewer has discovered, when you start making character a political issue you better make damn sure that mud pie wasn’t sent via boomerang.

But countenancing a state ban on a website used by more New Zealanders than any other? And not just individuals, but whanau and groups and organisations, many of whom rely on Facebook as a platform to support and stay in touch with each other?

Clark would have done well to visit Kiwibank's Facebook page. The 'discussions' that erupt over the non-performance of the bank's overloaded servers on the evenings when benefits and pensions come through can rival Kiwiblog.

Not sure that either party, Labour or National, are in favour of Internet freedom. The guilty until proven innocent anti-file sharing law, the "voluntary" Internet filter, the online bullying moral panic legislation, TICS, you name it: not much in that soup of silliness that promotes and protects the rights of Internet users.

To be fair, "yes we would stop that company trading in NZ" is pretty much the underlying principle behind all company taxation. Of course we'd be prepared to stop Facebook operating here if they weren't willing to pay their legal tax obligations, in exactly the same way we'd stop Microsoft or even Fletchers. So so dumb to be manipulated by Tova O'Brien into phrasing it the way he did though.

I’m pretty sure the key message that most non-wonks will have got is “Labour is promising more money for babies” and details of how much more are lost in the wash.

Possibly. Then again, plenty of non-wonks may also have seen the guy who very seriously would like to be the Prime Minister this time next year having to "clarify" his own policy. Plenty of folks didn't like Labour going into the '99 election with a clear and unambiguous policy to raise the top tax rate, but the pretty obvious reason why the "Labour's secret tax-and-spend agenda" attack lines didn't get any traction is because there was nothing secret about it. The entire Labour Party -- from Clark and Cullen on down -- were absolutely on-message from the moment the policy was announced.

So so dumb to be manipulated by Tova O’Brien into phrasing it the way he did though.

Oh, balls. Sorry, but I get as terse about that as Kiwiboggers ranting about poor Hekia Parata being “manipulated” by the evil media into arias of incomprehensible edu-crat gibberish. If you’re a minister of the Crown or party spokesman who can’t clearly articulate matters of policy and handle press interviews, perhaps Tova O’Brien isn’t the problem.

As Russell put it:

Clark should never have ventured on this issue without having a considered answer to the bloody obvious question of what we might do about getting these companies to pay their fair share of tax.

Exactly - a considered answer reflecting his party's policy on a hideously complicated issue. How hard would it have been to say: "Of course, Labour believes everyone should pay their fair share -- from ordinary working families to the biggest multinational corporation. That's the Labour way, and we will be announcing a considered policy closer to the election."

Instead, Clark came up with a mouth fart Revenue Minister Todd McClay would have been mocked relentlessly for around here, and quite rightly so.

Not sure that either party, Labour or National, are in favour of Internet freedom. The guilty until proven innocent anti-file sharing law, the "voluntary" Internet filter, the online bullying moral panic legislation, TICS, you name it: not much in that soup of silliness that promotes and protects the rights of Internet users.

Exactly. If Progressive refused to pay tax, we'd shut them down, however much people needed groceries. Somebody would buy the stores from the receiver and start them up again.

Of course it wouldn't come to that, companies usually write a tax cheque in the end. (Unless they are "Apprentice" presenters, in which case they try and bullshit the courts up to the last possible moment).

Exactly. If Progressive refused to pay tax, we’d shut them down, however much people needed groceries. Somebody would buy the stores from the receiver and start them up again.

Which is not a terribly good analogy. Unless I’ve really missed a lot of somethings, not even Clark is claiming outfits like Microsoft, Facebook and Google are engaged in flat out tax evasion. (And if they are, the IRD needs to be answering some hard questions about whether they’re properly resourced to investigate and prosecute complex tax cases involving multinational corporates.)

But when it comes to very large multi-national corporations engaged in complex and long-standing campaigns of aggressive tax avoidance across multiple jurisdictions? Well, as Russell pointed out, it’s nothing new or unique to New Zealand and really, really needs a more considered response from everyone than musing about shutting down Facebook. Or, for that matter, banning sales of IPhones and Windows until their producers get a local billing address.

Yes, it's a horribly complicated area of public policy for which there's no quick, populist silver bullet. Just thinking about it makes my tiny brain squeal with pain, but I'm not pitching for a seat on the front row of the Treasury benches.

The problem is that the current basis of tax (declared profits), while fine for a corner store, doesn't work well when a company can manipulate its accounts so that profits pop-up in a no tax/low tax jurisdiction, like Ireland.

(Facebook is a poor example - they don't pay much tax because they don't make much profit - $1.5bln a year off 1.1billion users, 2.4mln of whom are in NZ, so any fairly attributed tax system would raise of the order of a million bucks, not enough to finance the litigation costs of extraction.)

Or they've seen John Key go full bat-shit attack 'dishonest!!' 'misleading New Zealanders!' over something which wasn't actually WMD's, but a clarification of policy which was going to benefit the people it was meant to benefit either way.

Some may also have compared the media reaction, and the strangeness of the Nats personal attacks and concluded that they looked desperate and that it wasn't really a fair-go.

Add that to the Nats having said they couldn't afford PPL leave, but now it is affordable, but they are only going to fill the cup up 3/4 because that's where the financially responsible person would.

A second adopted Labour policy and we're on our way to seeing a third adopted allegedly with the reaction to the baby bonus.

So, yeh, despite the media narrative, this seems like a gotcha that DPF will trumpet, but that may bemuse many voters.

Ban Facebook! And Twitter, the New York Times, the Guardian.... Ban them all! It works a treat for China. It's also great news for providers of VPNs - more countries banning more websites means more customers for them.

What Craig said about the complexity of these MNCs and tax issues and brains hurting. What Labour needs to be saying is something about how they're going to work with the international community to hammer out a tax regime to ensure the MNCs are paying their fair share, but it'll take a long time and a lot of complex negotiation.

<q>So so dumb to be manipulated by Tova O'Brien into phrasing it the way he did though.<q>

Yeah, right blame the media. This guy may be new to politics (I hadn't heard of him before but that may not necessarily mean much, I'm getting older) but he should know enough - as a shadow minister - not to say daft things when he's speaking to media.

The first people I saw at the Tauranga A&P Show late last month were older women in bright blue tee-shirts proclaiming "Conservative Party". Would I like to take their pamphlet? No thanks. But as I was heading off I thought, no darn it. So I turned back and asked the smiling woman if she wasn't embarrassed by Colin Craig? No, he's a lovely man, was the gist of the reply, why should I be? Umm because he doesn't believe astronauts landed on the moon ...

"Oh," she says, with no hint of a blush upon her lined cheek. "That was just the media. He was misreported."